Daily Form July 31, 2008

Profit Patterns and Risk Management For Active Traders
Trade successfully without having to be right about the underlying market direction
THURSDAY JULY 31, 2008       07:30 ET

The annotations included below on the daily chart for the S&P 500 ($SPX) indicates that the 1320 area is a viable target in coming sessions. Attainment of this key level will motivate the growing cadre of bulls and could provide an opportunity for the bears to move off the sidelines and flex their muscles again.

The hourly chart for the Euro shows how we broke down below the $1.56 level yesterday and validated the prognosis from last week’s commentary. In today’s trading the $1.57 level should be a likely target and this might also be considered a fair value position prior to tomorrow’s key economic data.

Brazilian stocks, as captured in the sector fund, EWZ, staged a comeback rally yesterday following several weeks of sliding prices. The positive MACD divergence suggests that there could be sufficient momentum to take us back through the 50 day EMA and back towards the $90 level.


The patterns identified below should be considered as indicative of eventual price direction in forthcoming trading sessions. None of these setups should be seen as specifically opportune for the current trading session.
For full details on time horizons, risk management and hedging techniques please visit http://www.tradewithform.com

DUG  UltraShort Oil and Gas ProShares  

The Ultra Short Oil and Gas sector fund, DUG, has proven to be very profitable on the long side recently but as suggested here last week there is a definite technical hurdle to overcome at the 200 day EMA which is just above $36.

GILD  Gilead Sciences Inc.  

Gilead Sciences (GILD) faces a chart hurdle at $54.